Unsecured Loans with Bad Credit: Getting approved for a good loan with bad credit is one of the most difficult processes. Most banks don’t approve borrowers with bad credit from the start. But some take longer to process their applications with a low chance that it will get approved.
In recent days a new factor is introduced that is kept in mind while checking the application of a client. That factor is monthly income. Not all banks follow this criteria yet but most of them are using it.
What are unsecured loans?
- Unsecured loans are type of personal loans where you don’t have to put an asset as collateral. The loans are provided based on the borrower’s credit history.
- Unsecured loans are not as high as secured loans but are faster to get approved of.
- Since unsecured loans are given without any collateral, they have a relatively high interest rate also their payback duration is quicker.
What is bad credit?
Bad credit means that you have a bad financial history. Anything can leave a bad mark on your credit history like
- Unpaid loans
- Constant debts
- Unpaid medical bills
- Low average deposit rate etc.
Unsecured Loans and Bad Credit
Unsecured loans are given solely on borrower’s word and financial situation. So people with bad credit have a little difficulty in getting these loans approved.
Normally they are rejected when their credit history is reviewed but some banks allow them to apply for the loan. The process is relatively longer with more documents and the application takes longer to get approved.
How to get Unsecured Loans with Bad Credit
As mentioned above, now a days your monthly income is also checked while applying for an unsecured loan.
If you have a bad credit but got a fixed job with fixed monthly income than this raises your chances of getting your unsecured loan application approved. Usually these documents are to be attached with your loan application.
This gives the lenders a point and knowledge that you may be able to pay your loan back.
Unsecure Loans with Bad Credit with the Help of a Cosigner
Another way of helping your loan application approved is by getting a cosigner. Cosigner’s are normally close friends or relatives with good or acceptable credit. They sign your unsecured loan application with you as a backup. In case you are not able to payback your loan with interest than your cosigner will pay it in your place.
Banks that Offers Unsecured Loans with Bad Credit
There aren’t many banks that allow unsecured loans with bad credit but there are few well known banks. Bank of America, Citibank and chase bank. These are well known banks with a worldwide reputation so it is better to start safe.
Having a bad credit is difficult and may stand in the way of your loans and insurances. But it is not impossible to improve it slowly. Now that some banks offer unsecured loans with bad credit, you can use this opportunity to get your credit history straight.